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European Science Foundation

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06-04-07

It seems like it is going worse everyday with the European semiconductor industry.

We have some high-tech research facilities (IMEC, Crolles,...) but we can't produce or own chips in our continent?

Why is this? I don't know... But at the end of the story all the companies that are outsourcing their IC production

are not healthy because the market is like everyone does the same thing.

When you want to be a big good player you must have your own production, engineering and R&D.

When you outsource your production it can be that soon the factory that makes your product comes with the same product with another name

Read the following related story about NXP outsourcing it's production of IC's to TSMC

NXP going fabless after 90nm.

NXP has now said that all its production will be sourced from TSMC for chips with more advanced processes than 90nm.

NXP's rationale for the move is that TSMC can provide processes better than 90nm so why go to all the trouble of developing your own?

Funny how quickly attitudes can change. When NXP was part of Philips, when Pasquale Pistorio ran STMicroelectronics, before Freescale was bought by private equity funds, it was held as axiomatic by all three companies that it was an important competitive advantage to have access to the most advanced digital CMOS processes, and that the only way to achieve that was by developing them yourself

That was the rationale for getting the EU to pour hundreds of millions of Euros into Crolles over the years. Now, all three companies have pulled out of doing basic advanced digital CMOS research at Crolles.

Now, it seems, it doesn't matter whether you develop basic advanced CMOS process technology or not. Instead you can go to a public foundry, which is open to all, and have your chips made on the same terms as everyone else.

"If every company goes to foundries, using the same processes and cell libraries as everyone else, what differentiation can a company offer customers?", asks Malcolm Penn, CEO of analysts Future Horizons, "five years down the road, when ST (and for ST read NXP as well) asks: 'Why haven't we got any customers', the reply will be: 'We can get this from loads of other people cheaper, now that they're making them in the Congo

23-01-07

I don't feel good about the electronic industry in Europe at the moment, there are to few companies left that are pure European. It is time to work for the future, to invest in jobs... not like we are doing at this time we have to start up our economic rocket engine...

If we keep doing like this the semiconductor industry in Europe will be soon death.

Disaster for European High-Tech

It is a major blow for European high-tech as Crolles2 unravels with first NXP, and now Freescale, pulling out, leaving STMicroelectronics on its own with TSMC as a kind of junior partner.

Without Crolles 2 as a beacon of EU-subsidised process technology R&D, a lot of European work on related technologies, such as production equipment, will be de-emphasised.

Jobs will go at Crolles, and those are the jobs of highly skilled scientists and technologists which Europe should be doing its best to increase, not diminish.

OK, so there’s IMEC, but IMEC can only expand in so far as it has commercial contracts requiring more personnel, and IMEC already has most of the available major CMOS practitioners signed up.

Crolles 2 partners NXP and Freescale, both now under the yoke of private equity firms’ tight accounting procedures, are running for cover to where they know best.

For Michel Mayer, CEO of Freescale, where he knows best is IBM, his old company. He is to give up Freescale’s involvement in Crolles2 and throw in his lot with IBM’s process technology team.

NXP is to throw in its lot with TSMC, co-founded by NXP’s former owner Philips, and a long-time partner of NXP for foundry and technology exchange.

When Jacques Chirac, President of France, opened Crolles 2 a couple of years ago, he would doubtless have been appalled if he’d had an inkling that two of the three partners in such a flagship project for European technology prowess could pull out so abruptly.

To the EC funding bodies, these defections will be a breach of trust which may imperil future funding of high-tech R&D by the European public authorities.

After the shedding of European-based labour by the big semiconductor companies following on the 2001 tech collapse, the EC authorities were already sceptical about the European high-tech companies' claims that they were long-term job creators.

Now the authorities will be even more sceptical when it comes to considering future requests for public funding of high-tech projects.

Whichever way you look at it, this is a disaster for European high-tech.

Where will the benefit of years of EU-subsidised work at Crolles go? Who will reap the rewards from the multi-hundreds of millions of Euros contributed by the EC and by European national governments?

The answer is a few rich guys at the private equity funds, and a handful of the managers at NXP and Freescale who have profits-sharing, targets-based, contracts with their new owners.